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Standing Committee on Government Operations and Estimates



Tuesday, March 20, 2018

[Recorded by Electronic Apparatus]



     Committee members, I will call this meeting to order.
    Welcome, Minister Qualtrough and the other people from Public Services and Procurement Canada.
    We are today looking at supplementary estimates (C) and interim estimates. We have the first panel, Minister Qualtrough and her staff, from 11 a.m. to 12 p.m. Shared Services Canada is here as well. For the second panel we will have officials remaining from 12 p.m. to 12:45 p.m, and we'll need 15 minutes for committee business.
    With that, Minister Qualtrough, the floor is yours.


    Good morning, everyone.


    Thank you for the opportunity to appear before you to discuss the 2017-18 supplementary estimates (C) for Public Services and Procurement Canada, as well as Shared Services Canada. I will also take the opportunity today to highlight the funds that were recently announced in budget 2018.
    Joining me today from PSPC are Marie Lemay, deputy minister; Les Linklater, associate deputy minister; Michael Vandergrift, associate deputy minister; and Marty Muldoon, chief financial officer. From SSC we have Sarah Paquet, executive vice-president, and Alain Duplantie, senior assistant deputy minister and chief financial officer.
    We are all here to answer your questions.
    As committee members know, both departments play important roles in the daily operations of the Government of Canada, delivering high-quality, client-focused services to other federal departments and to Canadians. In these supplementary estimates (C), Public Services and Procurement Canada is seeking an additional $228 million in support of its operations. Of the amount sought, $152 million is for ongoing measures to help stabilize the Phoenix pay system and pay centre service delivery.
    I've said it before, and I'll say it again, it's completely unacceptable that our hard-working public servants are not being paid properly. Every day I hear stories of hardships, of anxiety, of stress caused by the failings of our pay system. I hear from and speak regularly with affected public servants from across the country, I read their stories in the news, and I hear regularly from unions about the personal toll this is taking. I hear about the family who had a hard time making ends meeting during maternity leave or the parent who had to tighten his belt during the holidays to buy gifts for his kids. These stories, Madam Chair, are heartbreaking. That is why much of this funding is directed toward services that will enhance support to the public servants experiencing pay problems.
    Since Phoenix was launched, we have more than doubled the number of compensation advisers. We will also soon have a hundred more people at our client contact centre, who will be able to provide more detailed information to employees who are calling about pay problems. Currently we are looking at how work is organized so that transactions can be handled more efficiently. At the pay centre we are piloting a new approach that organizes compensation experts and support staff into pods that specialize in specific departments or transaction types, and early results are promising.
    We are also investing in technology and improving our systems and processes, with a particular focus on better connecting Phoenix to a patchwork of over 30 government human resource centres.
    All this work is being led by an integrated team of senior officials who are taking a whole-of-government approach to stabilizing the pay system. Fixing Phoenix and ending the hardship it imposes on public servants across the government remains my number one priority.
    This brings me to my most recent initiative in an effort to further support MPs' and senators' offices in assisting constituents experiencing pay issues. I understand that every MP was emailed this flow chart yesterday, which is entitled “Assisting constituents with pay issues”, a need that was clearly expressed when I last appeared in front of this committee. Yesterday, additional information was sent to MPs and senators providing instructions on how to manage and send constituent pay issues to the appropriate contact. It is important to note that pay issues that are reported, whether through the office of an MP or senator, unions, departments, web forums, or the call centre are assessed by the pay centre. This builds on existing internal processes, and immediate efforts will be made to resolve issues that have the greatest financial impact on an employee.
    Madam Chair, when I last met with your committee in late November, we had the opportunity to discuss the full suite of measures designed to bring the pay system to a point of stability, and in the short term reduce wait times and late transactions. Our government is committed to doing whatever it takes to fix this situation, but as I've said, there is no easy or quick fix. We didn't create this problem, but it is ours to fix, and budget 2018 supports our commitment to stabilizing Phoenix and paying our public servants accurately and on time.
    To ensure openness and transparency of ongoing costs related to Phoenix, members of this committee have received a document that clearly summarizes the previous government's expenditures and unrealized savings, as well as the funds our government is investing to stabilize the pay system. That's the document that was distributed this morning entitled “Investments in Phoenix”.
    As announced on February 27, budget 2018 proposes investments of $431 million to continue making progress on Phoenix issues, including hiring additional staff to support the pay system.


     This funding will be largely used to increase capacity, in effect allowing us to bring the number of employees working on pay issues at the pay centre and satellite offices to more than 1,500. This capacity is filling a critical gap that was created when the former government eliminated the jobs of more than 700 compensation experts before launching Phoenix. The impact of this cut has been felt across government, and so additional HR advisers will also be hired within departments to assist employees with payroll issues.
    Our immediate goal is to stabilize the pay system to ensure that pay is being provided accurately and on time; however, at the same time we must also focus on a longer-term solution, one that makes better use of modern technology and provides a reliable and efficient pay system for public servants.
    That's why budget 2018 proposes to invest an additional $16 million in new funding for the Treasury Board of Canada to work with experts, federal public sector unions, and technology providers on a way forward for a new pay system. Our government is also funding the Canada Revenue Agency—$5.5 million over two years—for processing federal government employees' individual income tax reassessments that are required because of pay issues and for handling inquiries.
    Budget 2018 also provides funding for other priorities, including procurement modernization. I would be pleased to return to this committee to discuss our plans and priorities once the main estimates and departmental plans have been tabled.


    Turning now to other areas of our mandate, the supplementary estimates (C) for Public Services and Procurement also include some amounts.
    It provides $7.9 million to help us better deliver service to pensioners, and $6.9 million to ensure that Parliamentarians and Canadians continue to be served in the official language of choice.
    It includes $3.6 million resulting from the disposal of several surplus properties in Quebec and Ontario, which is to be reinvested toward the maintenance of federal buildings.
    It provides $12 million in funding to provide accommodation, procurement, interpretation and project management support for the upcoming G7 Summit in the Charlevoix region of Quebec.
    An amount of $2.3 million is also provided to improve our contracting processes, provide clarity to businesses, and ensure that federal procurement remains fair and transparent.
    An amount of $2.5 million is provided to continue to support online advertising by the government, and $1.1 million to undertake the project definition phase of the West Memorial Building Rehabilitation Project.


    I shall turn now to Shared Services Canada.
     Through supplementary estimates (C), Shared Services Canada is seeking $24.8 million in additional funding. This includes investments of $16.2 million to support this year's G7 summit. The department is providing information technology-related services to fit up an operations office and regional summit offices. This is in addition to the ongoing work SSC is doing for the G7 to install new cellular towers and upgrade existing towers, as announced last December. While these improvements will enhance summit operations, they will remain of permanent benefit to area residents and businesses.
    Shared Services Canada's supplementary estimates (C) also include $3.9 million to support new full-time employees in the government by providing a standard suite of such services as workplace devices, Internet access, and file storage; and $4.0 million in total net transfers from other departments, which will be used for various information technology projects and services.
     In budget 2018, significant new funding is proposed for SSC. About $2 billion will be invested over six years to build a modern, secure, and reliable information technology platform for the digital delivery of programs and services for Canadians. This investment will help reset and reinforce core IT services for the Government of Canada.
    The budget also provides an additional $110 million over six years to the Treasury Board Secretariat, starting in 2018-19, to be accessed by SSC's customer departments and agencies to help migrate their applications to secure, modern data centres or cloud solutions.



    Madam Chair, I am reminded daily of the important work under way in both departments as part of their commitment to excel in government operations and deliver high-quality programs and services that meet the needs of federal institutions and expectations of Canadians.
    I want to thank our hard-working employees who bring great dedication to all their tasks.


    Thank you, Madam Chair.
    We look forward to your questions.
    Thank you very much.
    We now go to the first round of questions with Mr. Ayoub.
    You have seven minutes, please.


    Thank you, Madam Chair.
    Thank you for being here, Madam Minister.
    As always, you are painting the picture of a complex system that challenges us on a daily basis.
    In your presentation, you talked about Phoenix. Could you tell us a little more about the plan and results you are hoping to obtain. How can we improve the situation? I am fully aware that people are working very hard to do so, but could you elaborate on what will happen? Phoenix was implemented, but what will happen in the near future?
    I would also like you to tell us about the online follow-up of the progress made. We are at a stage where we always want to be transparent and set the record straight. That's what you are doing, but could you make it even clearer for the benefit of Canadians who are listening.
    Thank you for your question.
    Frankly, it's a very difficult issue that we will not be resolving quickly.


     To be honest, this is a very complex file. While we are seeing progress, it is taking time, and it is costing money. In a number of different areas, we are focusing our efforts to ensure that our whole-of-government approach yields tangible, long-term results. This is not just a matter of a software program that isn't functioning. This is a massive business transformation initiative that was not properly scoped or implemented, and we're having to go back to fix things that never should have needed fixing in the first place.
    As we work on a more robust governance model, which includes an integrated team, a committee of deputy ministers, and a working group of ministers chaired by the Hon. Ralph Goodale, we are also looking at technological fixes and better integrating our HR systems with the pay system. We are also investing money in hiring people.
    At the same time, we recognize—and this is one of the things I've been quite focused on over the past seven months that I've been in this role—the need for supporting employees. Because there is no quick fix, we need to ensure that our public servants get the support they need. This includes access to an emergency salary and access to funds to have assistance in filing their taxes. This also includes better support through our call centre.
    As I said in my opening remarks, we'll have 100 more people in our call centre within the next four to six weeks. These call centre employees, who will now be public servants, will have access to individuals' files in a way that they previously did not.
    Before, an employee could call the centre and would basically get a ticket and register that they had a question. The call centre employees didn't have access to that person's file. Now they will, and this will make a massive difference in terms of supporting and helping public servants get the answers that they need.
    As I said, we are investing significant dollars in fixing—well, I'd probably say stabilizing—Phoenix, and of course we are looking at a longer-term solution that is not Phoenix. As we move forward, my laser focus, as I've come to say, has been on stabilizing the system, ensuring that our 305,000 public servants are paid accurately and on time every two weeks, and that a parallel process is begun to see what the next generation pay service looks like for the Government of Canada. That will take some time. In the meantime, we have to pay people every two weeks.
    Thank you.



    Thank you for those clarifications.
    I mentioned the online progress that will be eventually available and, yet, I'm hearing less and less about it in the media. Is that an indicator? It should be studied. However, a few cases have still appeared in the media. We want to make sure that the case of each employee is directed to the right place internally at the outset. Clearly, we are not preventing anyone from talking to the media.
    When constituents who have problems with Phoenix come to my office, we really ensure that all the internal procedures are followed to help the person and to process the file as quickly as possible. How can transparency help us and what are you already doing? Can you further clarify the progress made on processing the files?


    I think it's important to understand that we are building support around the public servant. We always encourage employees, first and foremost, to go and talk to their manager because their manager needs to understand the nature of the problem, so they can help them resolve it internally. There are also robust processes within the union structure that employees have access to. We don't want to interfere with those processes and we certainly don't want to divert any resources from stabilizing the system in order to create duplicate processes.
    What we've landed on, in terms of providing additional support to members of Parliament, in particular, so they can better support constituents, is a process, in which there is a series of questions or steps that a constituency office can take in supporting their constituent who walks in off the street, if you will. I think it's important to understand that this is a very unique situation that is different, say, from... I'm a member of Parliament as well. I get constituents walking in off the street with a variety of federal issues. When someone comes in with an immigration question, or a question about a GIC, or whatever it happens to be, as MPs, we help the individual access the system. The federal government is very complicated and it is sometimes difficult to understand the process, so we need to help them navigate that system. In this particular instance, we have a situation where an employee is asking a member of Parliament to help them better understand and to support them with an issue they're having with their employer.
    We didn't want to interfere with any existing employment-related processes. Ultimately, a constituency office can, first of all, ascertain where the individual works or in what department. Obviously, there are some departments that are serviced by the pay centre and there are some that are not. If that individual is served by the pay centre, their department or agency is served by the pay centre—
    You have to wrap up.
    Sure. We're doing a lot.
    Mr. McCauley, you have seven minutes.
     Welcome back, everyone. It's wonderful to have you back here.
    I have to say right off the bat that I'm extremely disappointed in your department.
    On November 28, 2017, both yourself and Ms. Lemay promised us by mid-December, within two weeks, that “We will get back to you in two weeks as to what the process will be.”
    It's actually been three and a half months. As you can imagine, my party, the NDP, MPs across the country, and the several hundred thousand people affected by Phoenix are not impressed that it's taken you three and a half months, when you promised us two weeks. The system you've come up with is completely inadequate to help people.
    One of the ladies I've been dealing with is Sebastianne Critchley. She was on Global News recently. She's been profiled in the National Post. I want to show you this. These are her emails that she has sent to us, and this is double-sided paper. Since I approached Ms. Lemay and Mr. Linklater in November to help her, she sent us about an eight-page letter outlining all of the issues that she's had. She approached me, and I went directly to the very top. Even with the very top people helping, we have a hundred pages of emails from the people in the department unable to help her.
    The reason I mention this...and I go back to your new system where all it does for MPs is to tell the staff to go back to your department. If you can't fix it, we'll send a form up to escalate it, and we'll get back to you in two weeks.
    These are Ms. Critchley's comments from this morning, “package outline steps to follow”. What happens when we follow those steps repeatedly? Again, these are the steps she has taken, and repeatedly it's failed.
    I will ask you again, will your department please help MPs set up a proper process to help those who have been Phoenixed? There are a lot of minor issues that can be handled this way, but there are a lot of very serious issues, people's lives are being destroyed by this system. Simply telling them to go to the MP, and have the MPs send an email to the department, and hope to get back within two weeks is not enough.
    Ms. Critchley sent another follow-up note to someone recently. She got a note back three weeks later saying, “We'll start looking into this, I am planning on reviewing this.” This is after three weeks, this is after Mr. Linklater, months ago, started it.
    On behalf of those people affected, would you go back and take a serious look at providing resources, and help MPs to help their constituents? This is not a Conservative issue, it's not an NDP issue, it's not a Liberal issue. It's a non-partisan issue of MPs being able to help their constituents.
    Simply sending out a form saying “Go to your boss” is not going to cut it. Please go back and review that, and get back to us on how you're going to improve the system. Why did it take three and a half months to get a simple form basically saying, “Go back to what you've already been doing”?
    I want to get on to the estimates. You've committed $16 million to find a new system that's going to be going through Treasury Board. The Treasury Board is the same department that had the Gartner report, and sat on it. The Gartner report clearly said Phoenix wasn't ready to go ahead. Treasury Board did not apparently pass it on to PSPC, it sat on it.
    This is the same Treasury Board that sat on the comptroller general's report in December that clearly showed the testing across all departments was showing a high failure rate, and Phoenix wasn't ready.
    The same Treasury Board that sat on the project status report in December, two months before Phoenix started, said, “Clear the backlog before you go ahead with Phoenix”, the same backlog that the government has identified as the main problem with the Phoenix fiasco. It sat on it.
    The same Treasury Board sat in committee in February, and questioned by the NDP and ourselves, said that Phoenix was good, 99% working, otherwise it wouldn't go ahead.
    Now, Treasury Board is so complicit and incompetent in this matter, why in the world would we trust Treasury Board to choose a new system to replace Phoenix?


    Quickly, in response to your first comments, we did take longer than expected to come up with a solution that we thought was workable, given my fundamental belief that we cannot divert resources from stabilizing, and we cannot interfere with existing internal processes. Those are the parameters that I have.
    Sorry, let me interrupt. So an MP helping someone like this, whose life is destroyed, are you saying is interference with the process?
    Not at all, that's not what I'm saying.
    How is it...Please let me ask the question.
    But those were the parameters that I gave.
    How is it, when I'm trying to step in and help someone, again with a hundred pages of problems, that this is taking resources?
    Whether it's her going to someone within the system for help, or me trying to step in, or my office more appropriately, to help this lady through a hundred pages of errors, how is that interfering? How is that taking away from resources?
     What I'm suggesting is that if we had set up a parallel hotline system in which people would have had to answer the calls, do the inquiries, or what have you, that would have diverted.... We have a call centre that will now be able to answer and access people's files directly, and it was thought that by....
    There are some significant changes in the way things were done in this, including using a centralized email, whereby one person will be looking at these issues, whereby your office will identify very clearly the financial impact.... Many of the questions we get from MPs, in which so-and-so has an issue, and then we have to go back and forth to figure out the nature of financial impact—


    How is your new system going to address Miss Critchley, who's probably sitting at work right now dealing again with another pay problem?
    The new system will get her. Les might be able to reply to the particular individual, but for a new question coming in, you'll get a response within two days.
    I'm not asking about a new question; I'm asking about someone who's been inquiring for three and a half months, and still every new inquiry is taking a month.
    How is this new system going to help?
     I am familiar with this particular case. and it is very complicated; I don't dispute that. For the fact the pay centre has not provided as prompt a reply as possible, I apologize, and I will take that back, Mr. McCauley.
    That said, as part of the process the minister has outlined, and as has been shared with members of Parliament, within the escalation team that we have at PSPC we are adding resources to be able to take on these cases and provide more personal assistance to the individuals who are having the difficulties you've outlined, with a view to being able to resolve more of them more quickly.
    However, to be able to triage and ensure that we are addressing the most serious cases, we are asking MPs' offices as well as unions to use a comparable process to identify for us the key, critical issues, so that we can home in on them as quickly as possible.
    Mr. Blaikie, you have seven minutes.
    Thank you very much.
    I want to come back to the question of the $16 million that's been allocated to find a replacement for Phoenix, working with experts and with the public sector unions.
    What does that process look like over the next year? Has it started? What's the first step?
    I'll ask Les to give some more details, but from our perspective at PSPC, we are focused 100% on stabilizing the current system, the thinking being that in parallel to that process, Treasury Board Secretariat is beginning the process of finding out what the next system would and could look like.
    You'll have to remember that this was procured eight or 10 years ago, and even if the system were functioning perfectly, we might be starting discussions about what comes next.
    As you can appreciate with the announcement in the budget of the funding, Treasury Board is now organizing themselves to complete the review of what a future system could look like. These are very initial days. They are looking at appointing a senior lead within Treasury Board Secretariat to coordinate as the employer across the offices of the comptroller general and the chief human resources officer, and the chief information officer, all located at Treasury Board.
    The view would be to then work with unions, the private sector, practitioners who are actually using the pay system now, to bring to bear the various perspectives that are out there to pull together an outline—
    At this point it seems to me it's a pretty vague plan in its early stages.
     How do you get to a $16-million budgetary commitment for this year without having a more specific plan on how you intend to move forward? Is that $16 million for staff? Is it $16 million for an office? Is it $16 million for paper? How do you get to $16 million without really knowing who you're even going to meet with yet?
    It would include all of the above. I would suggest that from the Department of Finance perspective, in assembling the budget they're probably looking at this as a bit of a drawdown, so that Treasury Board knows within what sort of envelope they're able to operate and draw down monies as they incur costs.
    Okay, but there's no real budget for the project as such or spending plan?
    Those questions should probably be directed to Treasury Board Secretariat.
    The next question I want to ask on the Phoenix file has to do with the money in the supplementary estimates to pay public sector unions the dues that are owed to them. Of course, I presume it's an advance and that it is going to be recovered from employees at some point, but I also understand that at the moment, part of the problem is that we can't actually say what a particular employee owes in dues and we don't have the confidence to say what they owe.
    What process is happening right now, and what does that process look like, in order to arrive at a point at which the government can say with confidence—not just in themselves, but that employees can have confidence—that they'll know for each employee what union dues are owed?
    We've heard a lot of stories in which employees are approached—and I know there was a recent announcement about this in terms of recovery of emergency pay, but it has been a persistent problem with Phoenix—and are told: “You owe us this much money. Give it to us now”, and in fact, “We're going to take it off your cheque, and if that means your whole cheque is gone, so be it: we want our money back.”
    Are we going to live a similar nightmare? Are federal employees going to live a similar nightmare with their union dues, when government decides it wants this money back?


     I would say a couple things.
    First of all, one of the significant benefits of what we're calling our “pod approach” is that we are looking at the whole individual in terms of making them whole. We're not just looking at one particular type of transaction for everybody. We're ensuring that when we look at Carla Qualtrough, we address all of Carla Qualtrough's transactions. That will allow us to have an accurate understanding of both what we owe Carla and what Carla owes us.
    We can get to a point where that is accurate. The challenge is when we've been doing things transaction by transaction. That was an attempt that was agreed upon with unions, and that was the approach we took in the beginning, which meant that you never had a sense of the bigger picture with respect to an individual.
    Les, I don't know if you could elaborate.
    Certainly. With—
    Are we at a point, then, where government effectively needs to conduct an audit of each individual employee to double-check the work of the payroll system? Is that being performed in a systematic way, or is it just kind of on a complaint basis? Is it the case that the most urgent cases are getting addressed and that you do a complete audit as part of that, but that eventually we're going to have to work through and audit each individual employee?
    We are aware that over time, once we get to a point of stability in the system, we will need to offer some sort of file review to employees so that they can understand their pay stubs and see that they're getting what they are entitled to, and so that if there are any anomalies, we are able to address them.
    I know that in some cases with my own constituents who work for the federal government, one of the things we've heard sometimes is, “Oh well, we demanded a lump sum back because the employee wasn't in touch with us in order to talk about a repayment plan.”
    In my view, given everything that has happened around Phoenix, if the federal government sees that an extraordinary sum of money is owed by an employee, whether it's $3,000, $5,000, $10,000, or $20,000, it seems to me wrong as a starting point to think that an employee could afford to absorb the maximum amount of that off their paycheck and that they could just get through a few pay periods without any money.
    Can you commit to having the department proactively contact people who owe money in order to establish a payment plan instead of putting the onus on the employee, who may not even know that they owe the money before it shows up on their pay stub?
    That's exactly where we're headed. I'll get Les to give the details of that.
    Certainly. We have been working with the unions very closely on this issue. It is having an impact on employees to their detriment. We are looking at providing maximum flexibility to individuals who may owe the government money, and as I said, we are looking at how we can best accomplish that through flexible repayment programs and plans, but only after we've been able to take the sum of the employee's file and reconcile all of the outstanding transactions.
    We will be giving maximum flexibility and not asking for all of the money back at a certain time. We will deal with the individual circumstances of the employees.
    We go now to Mr. Peterson for seven minutes.
    Thank you, Madam Chair, and thank you, Minister, for being here. Thank you, everyone else, for being here, too. It's always appreciated.
    I think I just want to echo what Mr. McCauley referred to. This clearly is a non-partisan issue. We all have federal employees in our ridings, some obviously more than others. I appreciate the efforts that are being taken by your department and the department's appreciation of the gravity of the situation. I think I speak for every member of Parliament when I say that the sooner the solution arises, the better, obviously. It looks to me like we're heading down the right path now, and I appreciate everybody's efforts and redoubling of efforts to get this resolution at least on the horizon as we work towards it. I do applaud your efforts on that. There's much to be done, still, of course.
    I just want to change channels here a little bit. You may know, Minister—and I'm sure you do—that our committee has been looking at procurement in general and specifically at the engagement of small and medium-sized enterprises, women-led enterprises, the procurement strategy for aboriginal persons, and these types of programs. They are, I think, part of the procurement modernization that the government is striving towards.
    I noticed in the budget that your department received, I think, $192 million for the e-procurement tool. I just wonder if you could elaborate on what that is and what role you see that playing in this general procurement modernization process that we're undergoing.


     I am particularly excited about our e-procurement initiative, and certainly it will be a foundational part of our overall modernization of procurement for the Government of Canada.
    As you all know, you've studied it, our procurement processes can be clunky; they can be waterfall and they can tend to lack innovation. We want to move to a world-class system that draws on best practices around the world; that allows for innovation; that allows for better and easier access; and that's not so burdensome, particularly on our SMEs. We don't need people spending all their time filling out applications; we need them growing their businesses. We are removing any unnecessary barriers that we are imposing as a government, while respecting of course that we have to adhere to principles of transparency and accountability. E-procurement will form a big part of this particular initiative, the idea being that right now we have this incredibly burdensome paper process. We are moving to a process whereby businesses can apply online for contracts; submit their applications, their bids, what have you, for contracts with the Government of Canada. We need to make sure that this is accessible; that this doesn't preclude companies and businesses—especially small businesses—from applying. We see this as a foundational tool toward our vision of a modern, agile procurement process for the Government of Canada.
    Michael or Marie?
     We've been hearing from suppliers about the complexity of the document; the opportunities are hard to find. We want to expand the supplier base and not create a group of people who are used to our system to be able to bid on government contracts.
    It also takes a long time, and it's not uniform across government. To add to what the minister said, the system will allow us to look at our processes and be able to be uniform and simplify them. Currently, we're looking at contracts to see how we can simplify them. We're taking some lessons from the Goss Gilroy report and looking at our processes, making sure they're done properly as we're going to automate this procurement system. We see it as a bit of an Amazon-type approach, where you go in and do your bidding.
    During our study, I think it's fair to say, we've heard from groups of people who don't necessarily feel they're currently able to engage with the procurement process.
    Do you see this e-procurement tool as improving their ability to engage in the procurement process, as opposed to adding another obstacle to it?
    Oh yes, absolutely. That's one of the driving factors for going to e-procurement, so that businesses, companies, individuals who normally wouldn't either see themselves in our process, or who in some way face a barrier to their participating, that those barriers are removed and companies see themselves as potential contractors with the Government of Canada.
    On the procurement modernization line of questioning here, I know in your mandate letter you were mandated to ensure prompt payment of contractors and sub-contractors who do business with your department. We did hear during our study that timely payment was a concern that a lot of service providers had when it came to dealing with the government. In fact, it served as a barrier for people, so they didn't bother to bid on some of the work they could have done.
    What progress has been made on this front?
    In January, we announced that we would be engaging with industry and experts to work toward the creation of federal prompt payment legislation. We know that this is really important for industry and leadership; you've heard it as well. We've engaged Bruce Reynolds and Sharon Vogel to lend their expertise to this process, and they're in the process of consulting with industry to provide some recommendations for us that will then form the basis of a federal legislative regime around prompt payment in the federal jurisdiction. I think we've made good progress; I think it's very exciting and it's been very well received from industry. These experts were the ones who led the process in Ontario, and industry is very supportive.


    I was going to turn to the estimates because obviously there are a lot of numbers here. I haven't talked about estimates yet, and this is the estimates process; I feel bad for disregarding them.
    I want to go again on this...
     Hurry up.
    Okay. Let's talk about Shared Services. We haven't talked about Shared Services for a while.
    The Vice-Chair (Ms. Yasmin Ratansi): [Inaudible—Editor]
    Mr. Kyle Peterson: Thank you for your time. I appreciate the whole sum of your answers.
     I'm happy to give 10 seconds to my Conservative friends over there because they'll make good use of them.
    We'll now go to the five-minute rounds.
    Mr. Kmiec, I guess you're sharing your time with Mr. McCauley.
    Yes. Hopefully, it doesn't get Phoenixed.
    You Phoenixed my case file manager, the lady in my office who helps Phoenix people, people with problems with their pay. She has the same problem now. Thank goodness that in her case it's a minor overpayment and she was able to fix it. In your example, what would she have done? Would she have filled out the form, or would she have come to me as her supervisor?
    A lot of people's lives have been screwed up, especially on the T4 issue. This is something that we warned the department and you, Minister, about months and months ago, especially those of us on the finance committee. Something that we members were talking about on a regular basis was that, come tax time, there would be a lot of people who would have serious problems filling out their taxes appropriately.
    Another government department, the CRA, is going to take them to town because they also have a track record of customer service excellence, just like your department seemingly has with regard to people with Phoenix problems.
    What actual, concrete actions are you going to take? How are you going to get through these issues? You've offered this new program, all this government spending that's going to happen. These individual case files can't seem to get fixed. Mr. McCauley has a lady who has taken time out of her life to try to fix her own problem in detailed format. I have people like that in my office too. Each one of us here has them.
    What is it that you're going to do for them? In the case of my employee, thank goodness for her that it's a minor overpayment issue, but you Phoenixed her. She is the case file manager responsible for helping people with Phoenix issues, CRA issues, and immigration files, and she has the same issue.
    I appreciate and apologize that your case manager is going through this. We are doing everything we can so that others do not have the same situation happen to them.
    There are a number of things. Obviously, you're in a situation as an employer. You're also in a situation as a member of Parliament. I think it's also really important to recognize that we are causing incredible stress on employees, particularly around tax time. That's where we are, I'd say, beefing up, for lack of a technical term, our support around employees at tax time.
    I'm going to let Les talk about the strong relations we have with the CRA, the success we've had around T4s, and the focus we've put on addressing overpayments to ensure that as many T4s as possible are accurate. For those that are not, there is an automatic reassessment, and people don't have to file again.
    Certainly, we do work very closely with the CRA and have regular exchanges of information. We are looking at taxes from the employee perspective so that where PSPC is in a position that it needs to issue an amended T4, that T4 is sent automatically either to Revenu Québec or to the CRA for an automatic reassessment by the tax authorities.
    Pardon me, but the CRA has a track record of dropping calls. That's its way of saying it never actually picks up the phone 60% of the time. The Auditor General has confirmed that. Many members of Parliament have pointed that out. I've experienced that. My office has experienced that, including the case file manager who has been Phoenixed; she has experienced that herself.
    Are you saying that if they have issues later on, they'll have to call and wait with the CRA on the phone?
    No. This is what we are attempting to do with the CRA—with a great deal of success—through a process of processing of transactions at PSPC. If it's determined that we have to issue a revised T4 for the individual, we do that. It's transmitted automatically to the CRA or to Revenu Québec for an automatic reassessment of the tax file without the individual employee needing to refile or to engage either with PSPC or the CRA. The employee then receives the updated notice of assessment from the CRA, and is also able to access through Phoenix or through his or her CRA My Account any updated T4s issued by PSPC.


    In November at our meeting, we heard that we finally, after all the months and months and a couple of years of Phoenix, made the training mandatory. What percentage of people have gone through this new mandatory training?
    This is tracked by the Treasury Board Secretariat as the employer. The last statistics I had are dated by a couple of weeks, but we can provide these to the committee.
    We've heard the Treasury Board's track record with Phoenix. I'd rather not rely on it. I hope you're doing more than just leaving it to the Treasury Board.
     The last statistics I had for completion of one or more modules of training was about 80,000 employees. We can go back and get the updated figures and provide them to the clerk.
    Do I have time for...?
     You have 20 seconds—or 10 seconds now, so you might as well give it back.
    I'll give it to Mr. Peterson. He can pass it on to Mr. Drouin. It's a redistribution of time.
    You have five minutes, Mr. Jowhari.
    Let me start by echoing my colleague MP Peterson's praise for the effort being put forward. Also, I'd like to acknowledge that the minister has acknowledged the challenges facing us.
    There is much discussion concerning the new process around resolution of the issues and the old process. I'd like to start by asking either the minister or representatives of the department this, as people are watching right now on TV, and some of them are employees. They are saying that documents are being shown around and that they have sent the document to your MP's office. Can you in simple words explain what the old process was, what the new process is, and how the new process is going to help settle the issues we're having? Can you give us two or three key characteristics of the new process so that we can bring some reassurance not only to our staff, but also to the employees, for whom the new process is helping to resolve some of these issues?
    I'll ask a couple of other questions, if time permits.
    I think a fundamental difference in the way we're approaching this new process, although I would probably better characterize it as a modified process, is that we are helping get the answers we need to move things forward. We would hear from MPs' offices that an individual works for a certain department that isn't serviced by the pay centre. That inquiry isn't going to follow the same path as if it were a department or agency serviced by the pay centre.
    Now we've set out a three-step process that determines where the individual works and whether it is serviced by the pay centre, what the exact nature of the issue they're experiencing is—we would get issues around, say, technological things, such as “I can't access Phoenix”, which actually go to the IT section of the department in question—and then determines financial impact in a much more respectful and dignified way.
    I've heard feedback from employees that they find it really difficult sometimes to talk to their manager about their personal finances. They feel vulnerable. It feels like something they don't want to talk about at work, and justifiably so. We are giving them space, within the MP confines, to have that conversation in a little more private and dignified way.
    Then all of those requests, once it's determined where they work, what the issue is, and what the financial impact is, go to a centralized email system that is operated by one individual, who then is tasked with the quality control piece, making sure that the information is accurate and robust enough—otherwise, there will be a back-and-forth with the MP—and guarantees a response to the MP within 10 days.
    We didn't have that before. Before, it used to go to the different regional desks in my office, which meant that different relationships developed with different MPs' offices. Now there is a very clear process in which questions can be asked that will lead to a success.
    Is it fair to say that we've streamlined the triage process, have clearly identified where the key issue is, and then have given it to the expert to be able to help? That's how I'm going to translate what you said.


    I think that's absolutely fair to say, and it's exactly what we're hoping.
    With about a minute and a half to go, I'd like to go back to the second document that you highlighted in your speech. This is about the investment in Phoenix.
    During your comments, you threw out the number $645 million. I'm sure that for people watching, the concern is going to be that this is a big number, and they will wonder how it has come to be that.
    Also, in the handout, there is a TBD. If either you or any members of the department could quickly make a comment around the breakdown of this $645 million, as well as how we can go about the TBD, it would be appreciated.
    l'll let Les do the reading.
    In terms of the TBD, there is a process—which the comptroller general is leading—following the fall report to the Auditor General, to determine with departments and agencies what their individual expenditures have been on Phoenix, above and beyond their normal pay operations.
    Departments serviced by the pay centre were to have realized savings of $70 million a year. Those monies have been left in departments for three years, from last year through this year and and into next year, with the expectation that those funds will be dedicated to HR to pay activities to support staff.
    The comptroller general will be reporting on that TBD figure in the coming weeks—in my understanding, by the end of May.
    From a PSPC perspective and that of the $645 million, most of the funding has been spent to date on rebuilding capacity, in terms of human resource compensation staff and advisers. We've gone from 550 compensation staff when we went live in 2016 to about 1,400 now, and more are on the way.
    Thank you very much.
    We now go to Mr. McCauley for five minutes.
    When we had Treasury Board in with regard to estimates, we were chatting. I guess there's a rather large RFP out there to hire a consultant to assist with Phoenix—something to do with PeopleSoft.
    Can you fill us in a bit on that?
    Sure. What...?
    How much is it for, and what is it generally to do if we're replacing Phoenix?
    It's a $2 million contract that—
    Treasury Board said $3.9 million.
    My understanding is $2 million, but if Treasury Board says $3.9 million, I'll have to go back and verify the figure. Essentially, what we were looking for with Treasury Board's lead was to be able to bring Oracle on board to provide advice as to the degree of customization in PeopleSoft, both in the Phoenix system and in the various HR PeopleSoft systems that are being run in a number of departments.
    The idea was having the owner, if you will, of the intellectual property and the software be able to give us fresh eyes as to the degree of customization and as to whether or not some of it could be undone or revamped to improve efficiency between those systems.
    Has the contract been awarded yet?
    It has not been awarded yet.
    Do you know when it will be?
    My expectation is that it will happen by the end of April.
    Minister, I want to switch subjects to the shipbuilding. When will the contract be awarded for the design? I think, last we spoke to Ms. Campbell in here, it was going to be April. Do you know when that's going to be?
    Her letter says just sometime in 2018, later in 2018.
     Mr. McCauley, that story remains the date. The award of the design contract will be later in 2018.
    It was going to be May of last year. Then it was delayed, and then it was delayed until, my understanding was, April. So, you're saying there is a further delay?
    The RFP closed at the end of November. We've been working now on evaluating the bids. It's an extremely complicated process, as you can imagine—
    Oh, I understand that, but—
    —making sure that we get the right design for the country, moving forward. That will be completed later this year, in 2018.
    So, it will be closer to the end of 2018?
    Later this year.
    The reason I ask is that the Parliamentary Budget Officer's report shows that every single month that it's been delayed—and it has been delayed significantly to allow BAE and other bidders in—is going to add a quarter of a billion dollars to the actual cost. If you're saying, as your report says, that the first ship will commence in the early 2020s, if it's going to be early 2020s, as in 2022 or 2023, it's going to be close to $3 billion a year of added taxpayers' cost because of these delays.
     I'm looking for some clear information on when this is actually going to be awarded and when it's going to get started.


    What I would say to this, Mr. McCauley, is that the good news is that we did close the RFP. As you said, it was delayed a number of times. Now it's closed. Now we're in evaluation. We have to do that part very, very well, and there are a lot of people on board doing that.
    I realize that, but—
    We still have expectations that it will be within the time frame that we said. We're very mindful of the dollars associated. This is one of the biggest contracts that we've awarded. We are very, very mindful, but we have to do it right. We are all hands on deck on that one.
    I agree, and I think we appreciate that, but on the other hand, taxpayers have a right to know when this is actually going to get done. So far, all we're getting is “later”.
     I'm just trying to clarify. Is it the end of 2018 and then 20...?
    You heard that the timeline remains from the last conversation, right?
    Well, we've heard other timelines that have changed, so I'm just seeking clarification. The last we heard, I think when Ms. Campbell was here, was that it was going to be April. Now we're saying later in 2018. Is that what I'm hearing?
    It will be later in 2018, but I can absolutely assure you that we are fully conscious of the need to proceed with speed on this. All resources are on deck to make this happen.
    Now, Ms. Lemay and Ms. Qualtrough, we've heard on the small business procurement study we're doing.... I think I can say its non-partisan. We're doing excellent work, and we're digging into it.
    One of the issues that we're hearing is how difficult it is, the amount of red tape. However, at the same time, tomorrow we're going to hear a third reading of Bill C-344, the community benefits on procurement, which is going to add a lot of uncertainty and red tape to the process.
    I've asked this twice before, and I'm going to ask again because it's third reading tomorrow. Has the government done a study on what Bill C-344 would mean in added costs to taxpayers and what it would mean in added paperwork and added time to our small businesses?
    You have fifteen seconds to respond so that we stay on time.
     The way we see this is that it is not really an added burden. It's additional information, but it also allows us to make decisions based on information and with awareness of getting that—
    Have you done a study of the added costs?
    Mr. McCauley, your time is up.
    Mr. Drouin, you have five minutes, please.


    Thank you very much, Madam Chair.
    I cannot help but ask a question. Today is the International Day of La Francophonie. Supplementary estimates (C) provides $6.9 million to ensure that parliamentarians and Canadians continue to be served in the official language of their choice.
    Can you elaborate on what the $6.9 million will be used for? I know it's not a big amount, but I'd like to know the details because it's important to the people in my riding.
    Thank you very much. I'm glad you asked the question in French, because it is indeed the International Day of La Francophonie.
    The amounts of money allocated to us will enable us to cope with the 40% to 45% increase in volume. We are reviewing the situation at the translation bureau, where a lot of progress has been made. There is a new CEO and a new person is taking care of the quality. More than 150 students were hired last year. We are renewing ties with industry and universities. So there is a lot of work to be done. The money will be used more specifically to deal with the increase in volume.
    Let me take the opportunity to thank you, Minister, and to congratulate Ms. Paquet on her new position.
    Now, I'll ask the burning question: what about Phoenix? According to the table here, we now seem to be focusing on capacity building. Can you tell us about it? You went from 550 compensation employees to 1,500, correct? How is the training of those employees going? Clearly, it's a new workload. Are you focusing more on training this time?
    We have very stringent training programs. We started hiring people at the entry level into the public service. We give them the opportunity to work and learn on the job, if you will. In addition, we give highly qualified and highly motivated individuals the opportunity to be promoted and become managers, coaches and mentors to help other employees in the network.


    Madam Minister, as a parliamentarian, I'm glad that you were able to get $645 million. There would have been a problem if you had been told to fix your problems and that you could not access those resources. I think resources are important for our officials to be able to work on those issues. Of course, we, as parliamentarians, do not work directly on that.
    In the table, we can see that, in the amount of $142 million, $15 million is earmarked for the Treasury Board Secretariat and $127 million for Public Services and Procurement Canada. Once again, the focus is on building capacity. With the $142 million, are you still planning to increase the number of employees, which has already been increased to 1,500?
    Yes, the $142 million represents expenditures that we have already made to increase staffing and capacity. The $431 million will allow us to maintain this capacity and increase it over the next five years.
    Some of my constituents who are public servants told me about their department needing resources. I think I heard the minister say that this will be done in the next few years or months. Is that correct?
    As I mentioned, the departments were allowed to keep designated savings of about $210 million over three years to help them rebuild their capacity in terms of human resources.
    Thank you very much.


    Thank you, Mr. Drouin.
    Mr. Blaikie, you have three minutes, please.
     I want to ask a question about the $2.5 million related to government advertising programs. Early in the government's mandate there was a lot of fanfare about a government advertising policy, and that applied particularly to print and TV. There were questions right at the time about whether or not that policy would apply to social media advertising. My understanding is that it never got there, and the advertising policy doesn't apply in the same way to social media advertising.
    We also know that your government has said quite openly that when it comes to large web-based companies such as Facebook, there's no plan to make them pay their fair share in terms of taxation within Canada. Then, recently, there are stories that have broken on the Facebook file suggesting that the information gathered through people's interactions with advertising on Facebook has been used for nefarious purposes, including influencing the outcomes of elections. In the absence of your government committing to any substantive action, I'm wondering whether it's on the revenue side of advertising with these folks, or on the security side.
     How responsible is it for the government to be shifting its advertising dollar focus to social media platforms instead of traditional media, which are also struggling in terms of revenue? Not only are we shifting towards a medium where the government is not taking the kind of action it should in order to provide revenue and security, it's also taking revenue out of struggling Canadian media outlets that depend—among other things—on that advertising revenue.
    I'm trying to square those two things and I'm having a hard time, so maybe you can help.
    I understand your question. I would first say that of course we're very concerned about the privacy and security of Canadians and their information. That's a priority for us.
     I would say, however, that we need to balance providing information for Canadians where they get their information. We are committed to traditional forms of media, but we also want to ensure that information is given to Canadians where they go, and they go to social media.
    I think Marie can talk about the exact dollars and what the dollars are for.
    I would agree with you on that. I do think it's important to get information to where Canadians go, but what I can't quite understand, then, is why your government wouldn't also commit to take action on the revenue side to ensure the government money that's being used—and not just government money, but advertising dollars in Canada—is nevertheless generating some money for the Canadian government and also some money that might then be reinvested in some of our struggling media outlets.
    Then, on the security side and on the advertising policy side, why your government.... It's one thing to say that we want to go to where Canadians are in terms of providing information, but why you wouldn't follow up to do that responsibly is a mystery to me.
    Mr. Blaikie, your time is up. I'm sorry. You can't get a response now, but you can ask them to submit a written response if you so wish.


    I'd be happy if they could do that.
    Minister, I'd like to thank you and your officials for being here.
     I'll the suspend the meeting for a minute or so to allow the minister to leave.
    Thank you very much, Madam Chair.
     The departmental officials will stay, and you can ask the same question of the officials.



    Committee members, we have to resume because we don't have much time.
     We'll start with you, Monsieur Drouin. You have seven minutes.
    Seven minutes? Perfect. I'll just put this on my timer so that I don't get cut off in the midst of my questions.
    An hon. member: Time.
    Mr. Francis Drouin: I'm glad to hear that I have some friends on this committee.
    Thanks again for being here. Madam Paquet, I did have some questions for you with regard to Shared Services. First, I would ask you to speak about your role with Shared Services.


     I was the senior assistant deputy minister in the strategy branch, and I was appointed executive vice-president on February 26, if memory serves. I am very pleased about that.
    Clearly, my role in the organization will be important. My role will be to attract women to IT and truly promote the business vision. For our president, Mr. Parker, it's very important that we are fully aware of what it means to be a business and a service. Customer service is very important to us, as is having a very good work environment. So that is what I will work towards with our president.
    Since the president and I have only worked together for a few days since my appointment, we will establish specific roles later.
    I will not go into too much detail about what you have to do next. I will give you time to acclimatize.
    I would like to come back to Phoenix. Ms. Lemay and Mr. Linklater, you told me that $142 million has already been spent this year and $431.4 million is needed to keep the staff in place. Has the department conducted an analysis?
    I know it's only a matter of time before we reach an acceptable level of service for our public servants. We are building capacity right now, but will there be an analysis done at some point to see whether we have to keep the capacity in place to reach an acceptable level of service?
    Is the department doing this right now?
    As you know, we have established service standards that we are not really meeting at the moment, except for a few key transactions, such as parental leave and sick leave. Other than that, we are still determining the needs in human resources to take care of arrears and improve service standards as soon as possible.
    As we mentioned, we started with a staff of 550 people. We continue to increase our capacity to ensure that we are tackling arrears as soon as possible. At a certain point, when we achieve an acceptable level of stability and acceptable service standards, we will be able to determine what the required workforce will be to maintain those service standards.


    I'm curious. Previously, 700 employees, compensation advisors, were laid off. Are some of those 700 employees included in the 1,500 current employees?
    We have put a lot of effort in determining whether retirees or those who had left the public service wanted to come back. Some, but only a few, are back in the public service, but we have increased capacity through external competitions to recruit new employees.
    Clearly, we understand the current situation of the Phoenix pay system, but are the lessons learned being applied to other projects? We need to focus on customer service, as Ms. Paquet said. In 2009, the system was designed to save money, but not really to provide customer service to our public servants.
    Is that a lesson the department has learned?
    Yes, absolutely.
    Yes. In fact, we are applying it to a number of projects.
    A good example is the electronic procurement system. We took over this project and applied the lessons learned. This project will be modular. We are reviewing and simplifying all business processes. We have included change management and training in the project. We are making sure that we have good governance. We evaluate each step to make sure we learn from our mistakes. In my opinion, the biggest mistake would be not to learn from this project. So that's what we are doing.
    It is a good transition towards the e-procurement system. Tell me about this system. Are you starting to use it in-house at the moment?
    Yes, we will use it. As the minister was saying earlier, we only have paper processes at the moment, which may seem surprising for people outside the department.
    Massive departments, which do so many transactions, always use paper processes. The contracts are complex, so we're always doing a number of things at the same time. We're in the process of seeing how we can simplify our processes. We are starting to introduce electronic elements. We now receive electronic bids. We're starting to take small steps. We have a contract with an association to work on simplifying our contracts. It is quite exciting, because we believe that we can make a lot of progress with our contracts. We want to modify the length of the contracts, and include fewer provisions. This will be a lot simpler, easier to understand and more open for the company.
    So, I can tell my suppliers that they will eventually no longer have to bring their great big boxes to the La Promenade Building.
    Even now, they don't have to bring them because, since January, we have been able to receive electronic bids. Before January, we led a pilot project over six months, during which 40% of the bids were received electronically. So, there's really a demand for it. In January, we made it permanent.
    When it comes to electronic bids, we must keep cybersecurity in mind. Have you studied the issue under this lens, in order to ensure that everything submitted electronically is protected? Commercial information and transactions between the government and its suppliers must be protected. I imagine that an analysis was done.
    Absolutely. We're working with the government departments that have more expertise than us on this subject. We're working a lot with Shared Services Canada.


     We are doing some technical stuff here.


    Thank you very much.


    Mr. McCauley is next, for seven minutes.
    Ms. Lemay, I want to get back to Bill C-344. Has the government done a study on what the added costs are going to be to taxpayers, if Bill C-344 is implemented?
    The straight answer to your question is, to my knowledge, no, but we don't believe there is going to be much additional cost, because that is information that is required.


    Why haven't we? This is ironic, because one of the first times I asked the question, right afterwards in this committee we had a delegation of parliamentarians from Vietnam and also people who work on their equivalent committee. They asked whether our government does studies on what the cost would be to the taxpayers for changes that we bring about through legislation.
    It was incredibly ironic that a nominally communist country was appalled that we don't do such studies. Why would we not do a study on something that's going to change all the procurement that the Government of Canada does?
    Remember that this is not going to be used in the evaluation of procurement; it's information that we're asking the bidders to provide so that we can make more informed decisions after. We are going to be asking for and collecting information, again, through the electronic procurement system. Our hope is that we'll be able to collect it faster by ticking boxes and putting in numbers, but that's the type of information that will be—
    It has nothing to do with ticking boxes. It adds a bureaucratic layer and adds costs for bidding.
    Why haven't we done a study, or will we be doing a study on what it's going to cost taxpayers if Bill C-344 passes, as I assume it will?
    I will repeat what I just said. We saw it as collecting good information to make good decisions, and not as a lot of effort.
    That's very strange.
    Mr. Vandergrift, we haven't replaced Lisa Campbell as the assistant deputy minister for defence and marine procurement yet, have we?
    No, not yet.
    Not yet.
    Does her absence have anything to do with the added delays of the shipbuilding? Will we have a replacement before we move forward, or will the new person be involved in the final decision?
    We have opened the process to fill the position, inside and outside of government. We did interviews just last week, so we will be able to announce in the near future the successful candidate. That person will be involved in the project. Delays don't have anything to do with Ms. Campbell's not being here.
    The team is fully working on the evaluation, I can assure you, at as fast a speed as they can.
    I want to follow up on Mr. Blaikie's questions about government advertising, because there is some money in the estimates for it.
    In this committee we studied the advertising, and the committee put forward a recommendation to push money away from Facebook and Twitter, etc., back into community newspapers.
    Part of the reason for that is that witnesses we had from the government stated very clearly that they had no metric for measuring success for advertising over social media sites. Their comment was, “No, we don't measure success apart from a click-through rate”. Part of the other concern, which we also had, of course, was access to the analytics from the Facebook sites or the government advertising.
    Considering that the unanimous report put forward is to re-evaluate and push the money back to local newspapers rather than put it solely on social media, has your department received direction from the government to move forward in that way?
    You may not know that the role of PSPC is really to manage that fund and the advertising campaign. The policy really originates in Treasury Board. PCO is also involved in the advertising fund.
    We are working on the current policy, which indicates that digital media and platforms are the primary means of interacting with the public, but there are multiple channels still being used to meet the diverse needs of the public. That is what we are working on.
     There's money in the estimates for audits for defence contracts, a small amount. What exactly are you looking at or auditing with that money? Is there money going forward for these very large contracts coming up with both Irving and Seaspan and potentially a fighter jet builder?
    These are funds in the supplementary estimates in front of you that continue a program that was started in 2012. That was a five-year program. There were evaluations done and a decision made to continue that program.
     It funds a group of auditors who look primarily at sole-source contracts, particularly in the defence space, where these exist primarily. They look through the books of the contract, and they look through the books of what the company has done to determine whether the profit levels are appropriate to what was originally agreed to at the time of the contract being entered into. Yes, it is something that's used for large sole-source contracts, and we do that to determine whether the profit is appropriate to what was originally agreed to at the time of entering into the contract itself.


    One of the issues that the PBO has had for the shipbuilding for Irving is access to the costs. I believe that a lot is on a cost-plus basis with that contract. Are we going to ramp up or—I know it's not a sole source—are we going to put in resources to audit those numbers to ensure that taxpayers are not being taken advantage of?
    We will be looking for sure at a contract of that size to ensure that it is appropriately managed.
    Yes, so it's not just sole-source contracts. You will have resources put aside for this as well?
    For these types of large shipbuilding contracts, that's something we'd be looking at for sure.
    Okay. Sorry, just to clarify, you're saying “will be looking”: is that “will be doing for sure” or “we will review” about doing that? I'm just looking for a commitment that it will get done.
    Yes, we will be looking at these types of large contracts for sure.
    You're not answering my question. “Looking at” is not committing that it will be done. Will we be putting resources to oversight?
    Yes. This program is used for those large defence—
    So it will be covering that as well?
    —contracts like the shipbuilding ones. Absolutely, yes.
    When I'm sitting at home and I tell my wife that “I'll be looking at doing the dishes,” you know full well that I won't be doing them. There's a big difference between looking at and actually doing.
    No, no. These types of contracts are exactly the ones that this program is intended to look at.
    Okay. I just wanted to confirm because you said sole source—
    You have 20 seconds.
    If I have 20 seconds, I'll redistribute my time to NDP colleagues.
    Mr. Blaikie, you have seven minutes.
    I want to ask a question about printers and printing services. Recently a decision was announced that Shared Services Canada is looking at saving money by reducing the list of eligible suppliers across government. Obviously, a number of suppliers who feel that they can provide competitive pricing—and have in the past—are upset by the fact that they're not going to be able to bid on this work.
    I'm wondering why the decision was taken. I'm also wondering with respect both to the equipment and to the services if you can share in terms of concrete numbers what the savings will be by reducing the number of people and firms able to bid on this work.
    I will talk in general about the procurement and turn to Alain Duplantie for the specific numbers.
    Shared Services Canada recognizes the importance of SMEs in the Canadian economy, and all of our procurement processes are open, fair, and transparent. For this particular process, we have been through important consultations, starting with two industry days and three requests for information. Small and medium-sized enterprises have the chance to participate in those processes, and one of the five qualified vendors is actually a SME. The other thing is that all the vendors we have worked with confirmed to us that they are using and relying on a national network to deliver those services.
    Alain, do you want to answer?
    With respect to the potential for savings, it comes as a result of an evolution of the model itself. If you contemplate the current construct, there are nine active standing offer holders who operate with the support of a set of small and medium-sized enterprises to actually fulfill demand across the country. Requests can go to any of the standing offer holders or their listed suppliers for one-off requirements, such as requirements to supply a printer, for instance, to configure, deliver, install, and service on a one-off basis.
     The new construct would add to that dimension. On the one hand, the ability to access a one-off request would continue to exist by way of a catalogue, but the request would go to the top-ranked major service provider, who would operate through themselves and their network of small and medium-sized enterprises.
     When you say “potential” savings, am I to understand there's nothing contractual that guarantees any cost savings for sharing the model in advance?
     I will just continue to paint the picture. It's not a guarantee inasmuch as it is a competitive model, so if it is the top-ranked bidder who will provide the service, it's on the basis of a set of performance indicators, and it's a competitive environment—


    There was a competitive process before that, so my understanding of the government rationale is that this was a trade-off in reducing the amount of competition, in the sense that you have fewer people bidding directly on the work in exchange for savings. What I'm not hearing from you is a guarantee of any savings on the other end of this process. Is that correct?
    Well, let me finish. Here's the next part.
    What is not available in the current construct is the ability for a department to seek a departmental-oriented standing offer for a managed service. That would be a competition amongst the three primary standing offer holders, who would then bring the experience of the industry to a department, a building, or a set of facilities to optimize the use of printing, scanning, and printing products across the requirements of that facility with the use of print analytics. That's where the optimization will occur and—
    I'm disappointed to hear that there is no real guarantee of any lower price. I understand that the idea of the system is to try to produce that, but I have to say that for purchasing out of the catalogue—and this is anecdotal and comes from my own experience as an MP—whether it is Staples or Grand & Toy, I'm often better off going to Staples myself, purchasing something, and then getting reimbursed for my MOB, because the government contracts under which you'd think bulk purchasing would produce cost benefits actually don't. I'm better off as Joe Customer off the street in Staples in terms of my MOB than I am ordering through the government catalogue.
     I think it's unfortunate that the ask seems to be to have faith that, at the back end of this process, government negotiation is going to secure lower prices. I would have thought that if we're going to reduce competition and make it more difficult for SMEs to access bidding on these jobs, there would be a guarantee at the outset, from the people remaining on the list, that you would see lower prices for the services rendered. Am I right that I'm not hearing that in what you're saying?
     I do hear that the hope is that this new process will generate some savings, but I'm not hearing that it's been negotiated at the outset, as a condition of being on this limited list, that those suppliers have agreed to produce any guaranteed cost savings.
    That's correct.
    Is that a correct assessment?
    That's correct, because it really is in the managed service space that the opportunities for optimization will occur. As opposed to ordering a one-off for the replacement of a printer, for instance, in a building, having a company or a company and their representatives contemplate the requirements of a business as it operates in the facility or a set of facilities to see what they really need is where there—
    Why for that model is it necessary to have fewer potential suppliers? From what I hear in terms of the way the model is working, it's about being more sensitive to the needs of a particular department or unit within government, and fair enough. That's not a bad idea, but why not allow just as many players to bid on that process as we had before? I don't necessarily see the connection between taking on a more sophisticated approach in terms of matching supplies—
    Mr. Blaikie, do you want an answer?
    —and having a more limited list of suppliers.
    Your time is up.
     I can give you 10 more seconds to answer, but I'll cut you off at 10 seconds.
    Thank you.
    The desire to go to three comes out of an extensive consultation with industry, a set of requests for information that provided written advice from various components of the industry to inform the strategy.
    Mr. Jowhari, please, for seven minutes.
    Thank you, Madam Chair. I'd like to go back to the investment in Phoenix. Let me summarize and then, by way of preamble, set the question that I'm going to ask.
    I understand the $645-million commitment so far. The biggest chunk is coming in at $431.4 million in budget 2018 and, as I see it, is really focused on three pillars or three initiatives. One is building capacity, two is enhancing technology, and three is supporting employees.
    My colleagues and your department have spent a lot of time explaining where we started and where we lost the capacity when the base went back to 550. We are at 1,400 and are going to 1,500, and we're going to support them with sufficient training.
    We've spent a little time on enhancing technology and supporting employees, and that's where I want to take the conversation. First of all, can you give me an idea as to what percentage of the $431 million is broken down between building capacity, enhancing technology, and supporting employees? That's question number one.


     Essentially, the lion's share would go to the HR capacity. The technological aspect is also considerable. From the $142 million, we spent about $30 million on the technology aspect. We have some assumptions around the $431 million, but that's money to be spent. I'm more comfortable talking about monies that we have spent to date.
    On supporting staff, we've been working on a number of elements, particularly the client contact centre that the minister referenced.
    That's where I wanted to go, because I think that was highlighted by the minister in her comments. Perhaps you could also expand on the pod concept. I really want to talk about some of the new features under enhanced technology, including enhanced client contact services.
    If you can focus your comments on those three areas, I'll give you the rest of the five minutes.
    I'm happy to do so.
     I'll start with the contact centre, which the minister did mention in her comments. To date we have been operating under a model where our client contact centre has been a contract service, in both Toronto and Ottawa, with individuals who are essentially ticket takers. This was set up following “go-live”, when it became apparent that we were not keeping on top of the number of issues and complaints that the staff had. We wanted to make sure that the staff who were trained in compensation work were focusing on dealing with transactions and allowing the service to provide the outlet for complaints and concerns to be registered.
    We've realized over the course of the last couple of years that we need to ensure that employees get better service with their first call. The idea is to transition from private sector to public sector. We're more than halfway there in terms of providing new public servants who are brought on specifically for this function to have training on the various systems that are related to pay and compensation. When employees call, they're not just leaving their name, their PRI, and the nature of their issue. They're actually talking to someone who has access to the system, can see where their transactions are, and can provide them with an update in terms of where things are in the system. They won't be able to resolve them, but they'll be able to provide more information than has been the case to date. We feel that will be a bit of a game-changer in terms of client service for staff.
    On the technological front, as you know, our vendor is IBM. They have been the project integrator over the course of the last number of years. They are still under contract with us for in-service support until June of 2019. We have moved from a task authorization basis with the contract—i.e., we give them a piece of work, they go and do it, they bring it back, and we sign off or not—to a managed service arrangement on both the technical and functional piece. IBM is taking on more of the risk and responsibility for solving problems without the government prescribing how they get to that solution. They are taking on more of the risk and more of the routine running of pay—365 days, 24 hours a day—and that frees up our crown resources to focus on the more higher-value technical fixes, functional fixes, that will bridge some of the inefficiencies we have.
    At the same time, we're looking at improving the training, the mandatory training that's been released by the Treasury Board. We also have a claims office that's up and running whereby people who are out of pocket as a result of Phoenix are able to make claims for reimbursement. We also offered, both last year and this year, up to $200 for tax services to individual employees who were looking for outside third party help to assist them with completing their taxes.
    I could maybe add something here.
    With regard to the TBD and the $70 million left in departments, which Les referred to, there's a certain amount of work that departments can do. I'll put my PSPC DM hat on, not the service provider side of the equation. We've come to the realization that having our transactions provided to the pay centre on time makes a big difference, and what order we entered them. One of the challenges we've had as a department, which includes my colleagues, has been getting the information to employees about the intricacies of the system. This is where this new training is so important, and really pushing employees and managers to take that training once they understand it.
    We just launched at PSPC a special concierge line, which we call “HR resource”, that employees of PSPC can call. Departments create their own place where they can actually help employees navigate the system. Last week we launched the ambassador program, where employees will be on the ground and will be able to help other employees find information.
    So there are things we can do outside of the pay centre, outside of the service provider, that can actually help the end to end.


     I have 20 seconds and I just want to make a comment. I hope all the lessons learned and the experience we're getting from Phoenix is actually being passed on to the Treasury Board Secretariat group, because I heard about a kind of arm's-length relationship and I think that's where really the key integration to come over the next period is. As they're doing the assessments, they should do those in partnership with the ones who are dealing with the issue on a daily basis.
    On that note, thank you.
    Thank you very much.
    We will have the last five-minute round before committee business.
    Mr. McCauley.
     Just so Shared Services is not feeling all lonesome, there was a report recently regarding Corrections Canada having an issue with Shared Services. Can you fill us in briefly about that? Was it a conflict or...?
    SSC and Correctional Services are working together to deliver services to Canadians. The October incident that was referred to in the news was only due to an external party provider in relation to building management. SSC and CSC worked together to resolve the issue.
    The article also mentioned about CSC leaving SSC. This is not the case at all. We're working together to deliver the deliverable services.
    Is it an overblown report? Is it exaggerated?
    The report is saying it's the third party provider. We are working with CSC, and they are continuing to take the services from Shared Services Canada.
    At the last appearance with Shared Services, Mr. Parker shared with us some of the departmental satisfaction scores. Do you have an update for us?
    Yes. The last time we were here, Mr. Parker reported on the November result, which was 3.46 over 5; and in December we did our annual result which was 3.4 overall, which is really trending upwards from the 3.06 in 2016 and 2.79 in 2015.
    Oh, great. Are you able to break it out? How was the score for Correctional Services compared to the one for last year in light of this media?
    If we look at 2016, the score for 2017 was up 1.1 point in terms of the general satisfaction.
    Wonderful. So it's a very isolated issue that maybe got overblown in the media?
    It's unfortunate that it was reported the way it was. Thank you.
    The $12 million for the G7 support—what is that going to be used for specifically out of PSPC?
    Michael will take that one.
    It is used for three main categories of activities. First is actually leasing the facilities, so leasing space here in Ottawa for the summit team as well as space in Quebec for hosting the summit.
    Second is providing a range of services for departments, so procurement services, event-hosting facilities, room set-ups, and that sort of thing. Third is translation services. You can imagine there's a big need for translation services. We're responsible for providing those also, so that's what that is for as well.
    Can you give me a ballpark breakdown by percentage, so, for example, half is for translation, just something really rough?
    The majority is for the real property, the leases. That's the largest component, Mr. McCauley.
    Marty has the details.
    We have the number here.
     Approximately 50% to 55% of the allocation is towards the real property requirements, and a very small fraction would be on the interpretation translation services side of the equation, about $1 million out of the $11.5 million or $12 million.
    Staying on the translation, I know the question came up earlier about the $7 million for extra translation services. It looked for parliamentary.... What is that extra $7 million going toward for parliamentary translation services?
    Do you want to....?
    Well, it's translation, interpretation, and closed caption hours.


    Has something changed from the past?
    Actually, there's been a large increase. On words translated, there's been a 47% increase; on interpretation days, a 40% increase; and, on closed caption hours, 46%. You're doing more business; you're consulting more; you're more—
    I realize a lot is probably due to Kevin Lamoureux and Garnett Genuis from our side talking more, but are there any other specific reasons?
    Well, there's more engagement. There's more consultation. We follow all the different consultation processes. The Senate also is more active. There are a lot of reasons why the business has grown.
    There's a lot more travel?
    Well, for example, we follow the commission on murdered and missing indigenous women. So for any of these commissions that are set up or engagement processes—
    How much do you think is because of the extra travel and the committee travel and the missing and murdered women?
     Well, this is about interpretation and closed captioning, so do you mean the increase in volume is what specifically...? That, we'd have to go back to.
    In addition, there are 30 extra MPs to support.
    That's true.
    Okay. Thanks very much.
    Before we finish, I just want to read in a motion. I hope I can get unanimous consent for this.
    But I can suspend it.
    Yes. I'll be brief.
    I can tell the witnesses to leave, then?
    They can stay for this, because it does concern them.
    In light of the news in the media that's come up recently with regard to our friends down in the States with the issue with Google and the data mining, I want to put through a motion again.
     I hope I can get unanimous consent for this motion. Given the current investigation facing Facebook and its distribution of advertising analytics to third parties in the U.S.:
That the committee hold a briefing with the Privacy Commissioner to discuss Government of Canada advertising policy with Facebook and the potential impacts on data collection and dissemination with third parties at the expense of the Canadian taxpayer, and that meeting be held no later than Thursday, May 10, 2018.
    I'm also open to maybe include Facebook to appear before then as well.
    For the committee's purposes, we haven't been given notice, but if the committee would like to bypass the process and give consent we could entertain the motion. What is the committee's will?
    Mr. Drouin.
    Madam Chair, we would take this motion as a notice, and we could discuss that later.
    An hon. member: Or the subcommittee.
    Or the subcommittee could discuss it.
    Well, we could invite Mr. McCauley to put the motion on notice today, and then we could—
     You're denying unanimous consent, then, Mr. Drouin?
     He wants to see the French version. Do you have it in French?
    The Vice-Chair (Ms. Yasmin Ratansi): Can we get it translated—
    Mr. Francis Drouin: I take it as an—
    [Inaudible—Editor] the translation.
    Mr. McCauley, I take it as an offence—
    Some hon. members: Oh, oh!
    Mr. Francis Drouin: I have to see it in French.
    Okay. Seeing that majority wants—


    It's the International Day of La Francophonie!


     Mr. McCauley—
    I will take it that I don't have unanimous consent.
    Mr. McCauley, you can put it on notice and we will look after it.
    Thank you to all the witnesses for being here. Thank you for your participation.
    We'll suspend for a couple of minutes before we go to committee business.
     [Proceedings continue in camera]
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